Barclays has approved a £1m loan for an off grid solar energy firm that could trigger the expansion of rural electrification in Africa and slash the use of kerosene.

With 500m people in Africa with no electricity at all and millions of homes using inefficient kerosene lighting, clean technology replacements could cut emissions significantly, as well as having added health and economic benefits.

It is the first time a major lender has issued funding of this nature to small scale solar developer operating in Africa with falling technology costs and banks' broadening view of the energy sector changing the landscape.

Azuri Technologies, which supplies small solar lighting and phone charging systems, claims the finance is the first step of a rapid rollout across Africa.

"If you look at the carbon impact of kerosene lighting worldwide is the same as the carbon footprint of Argentina," said Simon Bransfield-Garth. "There is an immediate impact there because kerosene lamps are appallingly inefficient."

As well as displacing fossil fuels the technology can also stymie the rapid growth in demand for power in Africa and other emerging economies without limiting development.

Unlike other renewable technologies, Bransfield-Garth claims small scale solar has the advantage of not requiring public money.

"Anything that involves subsidy or government policy is inherently slow so we essentially don't require that," he told RTCC. "We have a product that stands on its own two feet and the end customer spends less on their solar power than they do on their kerosene. The demand comes from the customer pull rather than a government push."

Azuri's Indigo system initially lets users run lighting and recharge mobiles from a small solar panel. A code is required to access the electricity and can be purchased on scratch cards.

Upgrading to bigger systems can allow computers, radio and televisions to be run in rural communities.

New investment

Barclays' investment suggests banks may be changing their attitude towards small scale solar projects, and Bransfield-Garth is confident that with backing Azuri can start reducing the numbers of Africans without power.

"All of them might be a stretch. We certainly have ambitions to make a dent in the problem. This is not something where we are seeking to have tens of thousands of customers we are seeking to have millions of customers.

"Today's agreement is significant because it is the first time a major lending institute like Barclays has recognised the distribution [of microgenration] at scale as a bankable asset, it's gone through the appropriate credit checks and processes.

"It is the first of a series of measures we'll be taking in 2013 to grow our presence in Africa. It is a benchmark and we'll be looking for substantial sums of credit finance in the coming year or two," said Bransfield-Garth.

Azuri won the Sustaina Award in 2012, presented by Arnold Schwarzenegger, who called the company a "true green action hero".